Since the financial collapse, business schools have indulged in much soul searching about their own responsibility and contribution to the crash. Some consider that if a different philosophy were taught then perhaps the bankers would have been less keen to devise and trade such complex and risky instruments. Did business schools really play such a significant part or are they exaggerating the extent of their role?
Personally, I suspect that the financial collapse has been seized upon by some academics wanting to change business schools for their own ends. There are a number of perspectives from eminent academics proposing modification of MBA teaching in line with their own philosophy. Some see it as a burning platform for change.
One target in the firing line is the Darwinian state of organisations and the ‘survival of the fittest’ competitive forces within business. Some believe business schools should pursue a more ‘humanistic’ approach to teaching. However there may also be an impression that some criticism emanates from leading academics who simply do not like the concept of market based economies. It does not accord with their own views of management education.
Clearly there is far more to life than Darwinian competition and the philosophy of what we are doing deserves much debate. However whilst business competes in market economies, the personal ability to compete will remain paramount. Those within an organisation who can contribute effectively to this outcome will flourish. Ultimately this will be a critical element in any leadership framework adopted by a business.
Business schools have also been guilty of extolling the virtues of some businesses and their leaders who have subsequently failed. Laudatory case studies have been written about a number of organisations who have promptly managed a precipitous decline. Academic objectivity can be clouded by apparent financial performance, which is then assessed to be a result of great leadership, strategy and culture.
Business does have clear social responsibilities and providing employment is as important as any. When business fails to compete effectively then closure and redundancy follows. As a consequence the social fabric of local communities is often decimated. Effective executives are critical to the process of competition, and business schools should not lose sight of this. Business for the most part faces highly competitive markets. Whilst the threat of extinction in many may seem more remote, the ability to manage effectively in competitive markets is a principal requirement for recruits.
So what does business expect from business schools? Business needs managers who can think creatively providing innovative solutions and who can lead effectively and with humility in highly competitive markets. Business schools have a dual responsibility to provide effective leaders in competitive markets who will actively promote and maintain sustainable values and uphold their social responsibilities.
As for business schools they must assume that Darwinian markets will continue. Greater engagement with business is necessary if they are to be influential in shaping the future business environment. Business people should be invited to contribute towards taught curriculum content. In turn academics should seek greater interaction with business through non-executive roles and management consultancy. This will elevate both status and influence with business.
Ultimately business schools must teach MBA students to be effective business people and to prosper in highly competitive environments. The social consequences of running businesses are important, and no more so than when businesses are run badly and fail. Both students and business expect no less.